Discontinued Operations

12 Months Ended

Dec. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

On May 9, 2024, we entered into the Sale Agreement with Forza in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of IIC. Forza’s application to acquire IIC was approved by the NYDFS on February 13, 2025 and the sale closed on April 1, 2025. We received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impact. We also recognized a $1,348,000 loss, net of tax impact, on IIC's fixed maturity portfolio, which was included in accumulated other comprehensive loss on our Consolidated Balance Sheets prior to the sale. The total tax benefit related to the sale and realized loss on fixed maturity portfolio was $527,000.

The results from IIC's discontinued operations for the years ended December 31, 2025, 2024, and 2023 are presented below.


	Year Ended December 31,
	2025 (3)			2024			2023
REVENUE:
Gross premiums written	$	13,120		$	39,704		$	34,334
Change in gross unearned premiums		(3,336	)		(3,337	)		(3,053	)
Gross premiums earned		9,784			36,367			31,281
Ceded premiums earned		(2,528	)		(10,044	)		(11,457	)
Net premiums earned		7,256			26,323			19,824
Net investment income		538			2,093			2,274
Net realized investment losses		(2	)		(66	)		(19	)
Other revenue		16			62			64
Total revenue		7,808			28,412			22,143
EXPENSES:
Losses and loss adjustment expenses		3,179			18,738			16,183
Policy acquisition costs		1,906			8,336			7,910
General and administrative expenses(1)		546			3,483			2,170
Total expenses		5,631			30,557			26,263
Income (loss) before other income		2,177			(2,145	)		(4,120	)
Other income		—			—			11
Income (loss) before income taxes		2,177			(2,145	)		(4,109	)
Provision (benefit) for income taxes(2)		540			(1,544	)		(1,103	)
Income (loss) from discontinued operations, net of tax	$	1,637		$	(601	)	$	(3,006	)

(1) Includes $385,000 in discontinued operations outside of IIC stand-alone results for the year ended December 31, 2024.

(2) Includes $1,103,000 in tax benefit related to discontinued operations outside of IIC stand-alone results for the year ended December 31, 2024.

(3) Excludes loss on sale and realization of unrealized losses on fixed maturity portfolio, the details of which are described above and are not operational results related to IIC.

The major classes of IIC assets and liabilities transferred as a result of the sale as of the date of sale and as of December 31, 2024 are presented below.


	April 1, 2025		December 31, 2024
ASSETS
Fixed maturities, available-for-sale	$	40,925	$	38,523
Other investments		988		978
Cash and cash equivalents		21,206		22,897
Accrued investment income		297		317
Premiums receivable, net		3,174		1,606
Reinsurance recoverable on paid and unpaid losses, net		265		259
Ceded unearned premiums		2,004		4,075
Deferred policy acquisition costs, net		4,462		3,647
Intangible assets, net		775		775
Other assets		488		166
Total assets	$	74,584	$	73,243

LIABILITIES
Unpaid losses and loss adjustment expenses	$	21,391	$	21,499
Unearned premiums		23,574		20,238
Reinsurance payable on premiums		—		3,966
Payments outstanding		2,223		3,091
Accounts payable and accrued expenses		101		1,058
Operating lease liability		65		69
Other liabilities		1,402		21
Total liabilities	$	48,756	$	49,942

On August 25, 2022, we announced that our former subsidiary, UPC, had filed plans for withdrawal in the states of Florida, Louisiana, and Texas and intended to file a plan for withdrawal in the state of New York. All filed plans entailed non-renewing personal lines policies in these states. Additionally, we announced that Demotech, an insurance rating agency, notified UPC of its intent to withdraw UPC's Financial Stability Rating. On December 5, 2022, the FLOIR issued Consent Order No. 303643-22-CO that provided for the administrative supervision and approval of the plan of run-off for UPC (the "Consent Order"). The Consent Order provided formal approval of UPC's Plan of Run-Off (the "Plan") to facilitate a solvent wind down of its affairs in an orderly fashion. On February 10, 2023, we announced that a solvent run-off of UPC was unlikely, driven by Hurricane Ian losses which exhausted UPC's reinsurance coverage. On February 27, 2023, UPC was placed into receivership with the DFS, which divested our ownership of UPC.

In the first quarter of 2023, the assets and liabilities of UPC were divested. In addition, activities provided by our entities, SCS, SLS and UIM, related directly to supporting the business conducted by UPC, were included. The assets and liabilities for the balance sheet as of the date of disposal are retrospectively reclassified as held for disposal, and the results of UPC and activities related directly to supporting the business conducted by UPC are classified as discontinued operations for all periods presented. This activity was included in our personal lines operating segment in previous filings.

The results from UPC’s discontinued operations, including the supporting activities provided by SCS, SLS and UIM for the year ended December 31, 2023, are presented below.


UPC Results from Discontinued Operations
	Year Ended December 31,
	2023
REVENUE:
Gross premiums written	$	(120,608	)
Change in gross unearned premiums		198,154
Gross premiums earned		77,546
Ceded premiums earned		(48,203	)
Net premiums earned		29,343
Net investment income		2,182
Net realized investment gains		1,343
Net unrealized gains on equity securities		2,080
Other revenue		2,717
Total revenue		37,665
EXPENSES:
Losses and loss adjustment expenses		36,898
Policy acquisition costs		(1,522	)
General and administrative expenses		11,307
Interest expense		22
Total expenses		46,705
Loss before other income		(9,040	)
Other loss		(2,004	)
Loss before income taxes		(11,044	)
Benefit for income taxes		(317	)
Loss from discontinued operations, net of tax	$	(10,727	)

As of February 28, 2023, the Company completed the disposal of its former subsidiary, UPC. This divestiture resulted in a gain of $238,440,000 for the year ended December 31, 2023. This gain was driven by the negative equity position of UPC.

The major classes of assets and liabilities moved as a result of the UPC transaction as of the date of transfer are presented below.


UPC Major Classes of Assets and Liabilities Disposed
	Closing (1)
ASSETS
Fixed maturities, available-for-sale	$	1,380
Equity securities		272
Other investments		12,882
Cash and cash equivalents		224,824
Restricted cash		7,758
Accrued investment income		875
Premiums receivable, net		22,733
Reinsurance recoverable on paid and unpaid losses, net		548,929
Ceded unearned premiums		75,262
Deferred policy acquisition costs, net		(89	)
Other assets		51,625
Total assets	$	946,451

LIABILITIES
Unpaid losses and loss adjustment expenses	$	920,431
Unearned premiums		98,655
Reinsurance payable on premiums		12,612
Payments outstanding		144,238
Accounts payable and accrued expenses		1,361
Other liabilities		3,476
Notes payable, net		4,118
Total Liabilities	$	1,184,891

(1) The Company divested its ownership on February 27, 2023, the date the DFS was appointed as receiver of the entity.

During the first quarter of 2024, due to a change in fact pattern, the Company evaluated its capitalized software, previously classified as held for disposal at December 31, 2023. As a result of this evaluation, it was determined that the use case of the software by the Company shifted. The Company has reclassified this asset and the associated amortization expense in the current period presented within this footnote in accordance with GAAP guidance, resulting in amortization expense for the capitalized software being captured in continuing operations prospectively. Property and equipment of $8,095,000 at December 31, 2023 was also reclassed at March 31, 2024, before first quarter amortization.

There were no other non-cash transactions during the years ended December 31, 2025 and 2024. During the year ended December 31, 2023, amortization attributed to discontinued operations totaled $3,544,000.